In a recent court document, the federal government announced its plan to remove the financial contribution requirement for online streamers set by the CRTC. Instead of the contributions, the government intends to provide funding to support the industry. The Attorney General’s office revealed this intention in the document dated July 17.

However, the Canadian Association of Broadcasters expressed skepticism about the government’s stance. Kevin Desjardins, the association’s president, highlighted discrepancies between the government’s communication and what they had previously understood. He emphasized that it might be premature to draw definitive conclusions based on this correspondence.

Culture Minister Marc Miller’s office declined to elaborate on the government’s position when asked for clarification. The spokesperson did not confirm whether the contribution requirement elimination would be permanent or temporary, stating that a new policy direction is under development.

Earlier in June, the government announced its decision to issue a new policy directive to the CRTC after the regulator increased contributions for major streaming services from five percent to 15 percent of their Canadian revenue. The government also revealed its plan to allocate $600 million annually to the industry.

These contributions, dubbed the “Netflix tax,” were introduced following the passing of the Liberal government’s Online Streaming Act in 2023. The government’s commitment to publishing the new policy directive to the CRTC in the following weeks was detailed in the July 17 court document submitted for the Federal Court of Appeal challenge by streamers.

Despite the shift in policy following pressure from the U.S., the United States Trade Representative commented that Canada might not receive recognition for this change. Trade Minister Dominic LeBlanc is currently engaged in discussions in Washington amid threats of new tariffs on Canadian goods by U.S. President Donald Trump.

Prime Minister Mark Carney emphasized that the decision to eliminate the tax on large streamers was made two months ago. He justified the move by citing concerns about affordability and emphasized the government’s investment in culture.

Reynolds Mastin from the Canadian Media Producers Association stressed the importance of requiring foreign streamers to reinvest a portion of their earnings from Canadian audiences back into Canadian content. The association awaits further details on the policy direction from the government.

Various stakeholders, including NDP MP Heather McPherson and Conservative culture critic Rachael Thomas, have expressed contrasting views on the government’s decision. McPherson criticized the move as favoring U.S. companies at the expense of Canadian media, while Thomas accused the Liberals of burdening Canadians with a significant subsidy for American streamers.